My turn: The Big BOPPER vs. Alaska

Posted: Sunday, May 13, 2007

The Big BOPPER (Bellicose Oil Producers Publicizing Exaggerated Rhetoric) is back, cranking out the same old tune - a tune that flopped during the Murkowski Administration and the 2006 legislature. The lyrics to the song are, "We must own the gas line; we must own the North Slope Basin; No Newcomers!"

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Big BOPPER appears to believe that Alaskans pay more attention to the large oil companies' expensive advertisements than to the front page of the Anchorage Daily News. On May 5, 2007, the CEO of VECO, the producers' handmaiden and now a confessed felon, was quoted on the front page of the paper as stating to a legislator in 2006, "I own your ass!" Also on May 5, 2007, Big BOPPER attempted to deflect attention from itself by bombarding us and the legislature with a barrage of rhetoric focused on bamboozling Alaskans into believing that if AGIA passes with its mandatory pipeline expansion provisions, there will never be a gas line.

Alaskans spoke clearly on Nov. 7, 2006. Govenor Sarah Palin won the election by a landslide after campaigning for a competitive gas line process containing a series of "must-haves" for the gas line. Palin has thoughtfully crafted AGIA to provide for robust competition among prospective project sponsors, including producers and other interested pipeline companies.

AGIA's rolled-in rates for gas line expansion requires that when large amounts of new gas are discovered by one or more North Slope explorers and when expansion of the gas line becomes economically viable, the costs of this expansion will be shared equally among all gas line users, up to a reasonable 15% rate - above which the original shippers would not have to share in these costs.

There is no reasonable basis for objecting to the requirement of rolled-in rates. But Big BOPPER is fighting to strip rolled-in rates from the gas line bill. Under the 2006 gas line proposal supported by Gov. Murkowski, a few huge oil companies would have formed an oligopoly under which they would have owned the gas line, stripping the state of any leverage to affect commercial decisions about gas production for the next 45 years. These few huge producers would have become the only entities who could reasonably expect to ship gas through their line - forever. Without AGIA and rolled-in rates, new explorers could not expect to be able to ship newly discovered gas to market.

Big BOPPER would like us to believe that they will refuse to produce their gas unless they can ship it through a gas line they own, a gas line without rolled-in rates and without any requirements for gas line expansion.

Under AGIA, a gas line will be built. North Slope gas will get to market. The existence of a gas line will automatically make the reserves on the North Slope commercial (i.e., profitable). The producers will nominate their gas for shipment in the gas line, or they will face lawsuits not only from the state, but from their own shareholders, not to mention incurring the wrath of the White House, Congress, and the nation. But even if Big BOPPER does not agree to produce North Slope gas, other companies will gladly step forward as producers.

Alaskans, do you want to mindlessly dance to the same siren song that lulled former Govenor Frank Murkowski to sleep at the wheel when Big BOPPER sang it last year? Or, would you prefer to support AGIA, a business model built on the principals of capitalism - free, open, expanding, and competitive markets.

If you do not want to see Alaska owned and completely controlled, tell your legislator that you want him or her to support AGIA with rolled-in rates.

Gov. Palin has shown us that she stands proudly and firmly on the side of the people of Alaska, rather than resting comfortably in the deep pockets of a few huge oil companies. Let's support Gov. Palin's fair, strategic, and long-term vision for Alaska's future.

• Paul L. Craig, Ph.D, is a board-certified clinical neuropsychologist and has practiced in Alaska for 27 years. He has served on the Board of Directors of the American Psychological Association and is currently a Trustee for the American Psychological Association Insurance Trust. Craig is also president of Trading Bay Energy Corporation - an independent oil and gas company he founded in 1993.

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